1. New Lease Standard
Work should begin now to adequately prepare for the adoption of the new standard:
Contract review / data collection
Education of stakeholders (finance, tax, treasury, compensation, investor relations, operations)
Design of new process and internal controls
System considerations
Don’t procrastinate! It is important to get started early as the level of effort might be more significant than expected.

2. Data Collection
Building a complete inventory of all leases should be a priority.
Complicating factors may include:
Lease management and accounting often decentralized, actual number of leases may be higher than expected:
Different locations (manufacturing or distribution facilities)
Different types of leases (real estate, equipment, vehicles, technology)
International subsidiaries
Data sources may vary
Systems, databases, Excel, offline
Not always recorded in same account
Data quality may vary as well - could be extensive manual effort to gather data from agreements and fill gaps

3. Process design and internal controls
A well designed and sustainable process is key:
Need to maintain existing accounting while preparing for new standard
Consideration of different locations –ongoing maintenance of data
Controls over complex calculations and key inputs:
Type A or B
Re-measurements
Lease term
Disclosure requirements (reconciliation of liability, maturities, restrictions, significant judgments and assumptions)

4. System solution? A system solution may be necessary due to :
Number of leases and volume of activity
Complexity of calculations (Type A or B)
Need for consistency
International subsidiaries with statutory reporting under IFRS
Dual reporting during transition period
Considerations:
Global consistency
Aligning with final standard
Time to gather requirements, make decision and develop - interim solution
Partnership with IT and other functions impacted